Why should a big corporation go out of business? Why should /any/
corporation go out business?
Maintaining a corporate shell with tax revenues in order to deliver
paychecks sounds a lot like escalation of welfare to include
white-collar workers and executives...

I think that's pretty superficial. Corporations encounter financial
trouble when they adopt non-viable business strategies, mismanage
finances, elect incompetent boards who hire/retain top execs who make
bad business decisions, attempt to end-run the legal system, or alienate
their marketplace.
You might find it interesting that I gave notice and left a former
employer of yours when I saw some of those same behaviors become
acceptable within that corporate culture. I'm disinclined to be sympathetic.

Saved by the K car, indeed. I wish I could say /that/ never cost /this/
taxpayer a single cent. My bad, because I made the purchase decision -
but I have some first-hand experience how that loan was paid back - and
I resolved (and /kept/ that resolution!) to never buy another Chrysler
product. For me, your example is unconvincing.

Then let's be honest and smart enough to make the welfare payments to
that person instead of those who've already demonstrated that they can't
manage money.

So our taxes paid for a bailout loan that was repaid by foisting cheap
crap on people who expected reasonable value for their money. If that's
acceptable to you, then you got what you paid for. It isn't acceptable
to me because I didn't get the value I paid for.
Ah! I get it - your sympathy doesn't extend to those who get stiffed to
make the bailouts work. Strikes me as a bit parochial...
...but as you said - so what?

Exactly. For this reason neither the corporations, banks, OR the
individuals who spent money they did not have should be bailed out
by the rest of us who live within our means and/or by jacking up
the Federal debt to even more stratospheric levels.

First...while I'm not from the US, I'm still impacted by the issue.
I'm generally in favour of letting the impacted businesses collapse
under the weight of their own collective stupidity/greed. However, I
think there's probably a kernel of truth to the "too big to fail"
sentiment. (Of course, as one economist put it, that just means that
they were "too big".)
Hypothetically suppose the US government (and all the other world
governments) did let the impacted corporations collapse. It seems quite
possible that domino effects would throw basically the entire developed
world into a recession.
I'm Canadian and arguably our banking system has been one of the least
impacted in the G8 due to stricter regulation. Even so, if the US and
Europe were to have major problems, we'd be screwed as well because
we're primarily an export nation.
Because of this, I'm currently in the "reluctantly bail them out and
then try hard to make sure it can't happen again" camp.
Of course the downside of the bailout is that the next time the bankers
see an opportunity for a quick buck via a risky move, all they have to
do is make sure they're "too big to fail" and they've got an instant
security blanket.
Chris

You and me both. :)
It sticks in my craw that there don't seem to be any effective penalties
for the industry people involved. Sure, a lot of people took on much
higher mortgages than they could reasonably pay off, but their bankers
led them on, or at least didn't dissuade them.

That is the risk. However, the alternative seems to be that a
significant portion of the global banking system implodes because it was
overextended.
Whoever thought that a developed nation (Iceland) could basically go
bankrupt? It's crazy, but it happened.
Chris

This is nonsense. The "people to blame" are the big spending politicians
and their mooching constituents who all wanted what they could not
afford. The bankers - while not blameless - are the *last* place the
problem was born. You want to punish someone? How about millions
of Western/US citizens that bought stuff/houses/cars/boats they could not
actually afford and then whined that they couldn't make the payments.

Sure, there are many people who took on more debt than they could pay
back. However, a responsible banker should say "no, you can't have that
loan since the odds are that you won't be able to repay it".
If the loan officers had been doing their jobs, people would never have
been able to get the loans to buy all that stuff. Instead, the banks
were coming up with exotic mortgages to try and entice people to borrow
more money. (I bought a house 2 years ago, and my bank was perfectly
willing to give me a mortgage almost twice as big as what I was prepared
to take on--and that's in Canada where the industry is more tightly
regulated.)
The Fed made it so cheap (1% interest!) for large institutions to borrow
money that it was extremely tempting for organizations to leverage
themselves to the hilt in order to borrow from the Fed so they could
turn around and lend it out at higher rates.
Chris

Since when are people not responsible for themselves? The borrowers
were big boys and girls. The idea that they were somehow coerced into
borrowing is absurd on its face - it takes a LOT of paperwork and signing
to finish up a loan. The fact is that people got greedy and now want
to lay off their responsibility on the eeeeeeeevil bankers.

Not true. The Federal weasels forced the bankers to give loans to
people whose only "income" was welfare via the foolish lending
guidelines jammed down Freddie/Fannie. This was *government mandated*
not initiated via the banks.

Both borrower and lender are adults of sound mind. Why do I have to pay
to bail out either party of their respective stupidity?

Exactly. Now ask yourself *why* the Fed did this? Cheap money makes
servicing the existing debt less expensive. This means political
vermin can go into MORE debt to buy votes to get/stay elected. How
else is the ultimate political weasel, Obama, going to make good on
his many promises, for instance. More debt. Beyond that, artificially
reducing the interest rate has the effect of devaluing the dollar, at
least indirectly. This means that we get to pay off the old debt with
much less valuable dollars - another common ploy of the political weasels.
This works in the short term, but in the longer term, it corrupts the
economic foundations of the nation so badly, it comes back to haunt all of
us.
In short, the US economic has been destroyed not by that eeeeeeevil George
Bush, or the eeeeeeeeeevil oil companies, or the eeeeeeeeevil bankers. It
has been destroyed by *its people*. The mooching, lazy, something-for-nothing
losers who want what they want whether they've earned it or can afford it.
The political classes (all of 'em, left, right and center) and bankers were
just accessories to the murder perpetrated by the greedy, foul, and
malignant larger population.

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